Understanding the dynamic relationships between CSR and CSIR

Abstract

PurposeCorporate social responsibility (CSR) and corporate social irresponsibility (CSIR) co-exist within many firms. Yet, without understanding how CSR and CSIR are related, our knowledge of these concepts is incomplete. This study initiatively explores four relationships between prior CSR/CSIR and subsequent CSR/CSIR.Design/methodology/approachThis study uses the KLD database as the source of measures on CSR and CSIR. The final sample contains 1,820 firms and 14,420 firm-year observations from 1991 to 2013. The Arellano—Bond GMM estimator is used to test the hypotheses.FindingsThe empirical analyses yield the following results: (1) a positive relationship between prior CSR and subsequent CSR, (2) a negative relationship between prior CSR and subsequent CSIR, (3) a positive relationship between prior CSIR and subsequent CSR and (4) a positive relationship between prior CSIR and subsequent CSIR.Research limitations/implicationsThis study provides comprehensive evidence of the dynamic relationships between CSR and CSIR by incorporating multiple relationships between these variables into a single study. It also identifies key contexts that shape these relationships and identifies several promising areas of further inquiry.Originality/valueThis study is the first to examine the dynamic CSR – CSIR relationships in a single study. Most previous studies investigate either CSR or CSIR; few studies have incorporated them into one study.